Thursday, October 04, 2007

The past few days have not been good ones for Toyota. It seems that everyone want to target Toyota for disappointing them in their fight for higher fuel efficiencey standards being mandated by Congress. In other words, the fight over CAFE.

BackgroundCongress is in the middle of working their way through a new energy bill. In it (or at least in one version of the bill) there is a new standard being set which would raise fuel economy standards to 35 miles per gallon for both cars and trucks. A competing effort, backed by the auto makers, would increase fuel economy standards to 32 mpg by 2022, but that bill has a bunch of loopholes, including a provision for if the new standard is even feasible.

Not surprisingly, a lot of groups would like to see the stronger version of CAFE pass while the automakers would like to see the weaker version pass. The auto alliance, a partnership between the major automakers, has led the fight against the stricter standards.

The Auto Alliance stance boils down to two arguments. The first: US consumers buy what they buy. If they want trucks or cars that get 2 mpg, then we want to sell it to them. The second argument is built on feasibility and cost. Changing the cars and trucks over into fuel sippers would be very costly, and may not even be feasible.

Now, it's not surprising to see the Big 3 coming down on the side of lower standards. Their big money makers are SUV and trucks which do not pass the standards. But the groups fighting against the automakers are most upset about is how Toyota, as part of the auto alliance, is also coming down on the weaker side of things. After all, Toyota already makes cars and trucks that pass the codes being mandated for 2020.

The AttackFirst, the National Resources Defense Council (NRDC) launched a campaign to "Tell Toyota North America President Shigeru Hayakawa to move forward on fuel economy by supporting a meaningful increase in federal fuel economy standards to 35 mpg by 2020."

Since they launched their campaign, over 8,100 messages have been sent to Toyota using the NRDC on line message form demanding an explanation for their stance on higher fuel standards.

Then the New York Times published an opinion piece from Friedman, who lambasted Detroit, the congressman from Michigan, the Big Three, etc... But what he really latched onto was Toyota. He makes the point that Toyota (and for that matter, the others) could meet the 35 mpg standard today, after all look at what they do in Europe. Also

If Toyota were to take the lead on this front, it could enhance its own reputation and spur the whole U.S. auto industry to become more globally competitive. Hey, Toyota, if you are going to become the biggest U.S. automaker, could you at least bring to America your best practices — the ones that made you the world leader — instead of prolonging our worst practices?

The DefenseThe responses from Toyota and GM weren't slow to follow. Both companies point out that

European and Japanese vehicles are smaller and more fuel efficient. Fuel taxes are higher. Much higher. Given Americans’ loathing for higher taxes, it is no surprise that Mr. Friedman omits this inconvenient truth.

and

Americans will continue to need and want variety, including pickups and SUVs. Nobody forces cars and trucks on consumers. They vote with their wallets.

In other words, we (the US) deserve what we asked for.

Why ToyotaToyota is being targeted for two reasons. One, those who advocate higher fuel economy standards expect more from the company that makes the Prius. But secondly, and this is the more important point, they are seen as the most likely to break from their fellows in the joint alliance.

Toyota has called for higher standards in the past, while the Big 3 (through the congressman from Michigan primarily) domestic companies have stonewalled any efforts. Toyota makes fuel efficient vehicles that would help them most easily deal with any new mandates. Besides which, Toyota has a perception of being 'green', and the advocates want to challenge that reputation in an effort to make them bow down to public pressure.

While I understand the efforts being made, I'm not sure targeting Toyota is all that fair. Toyota is a car company which sells cars to the American public. It's not their fault we have the rules we have or that they thrive in the current situation. Nor is it their fault we buy the cars we do. Pressure needs to be applied to those who make the rules and those who purchase the cars.

Besides which, I would point out that Toyota would have the most to lose if the current rules change. Since a lot of people, if given the choice, would still buy domestic if the domestic companies made what they wanted (in this case, more fuel efficient vehicles), Toyota doesn't want the Big 3 to be forced to do so. That makes Toyota the least likely to change sides.

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